I have been trying to decide between the two, with the obvious downside to zwave being COST. However in my research on the forum I see a whole lot of people having issues getting the insteon systems up and running successfully using ddamrons method. Alot of the threads dont seem to be solved either. So my main question, has anyone attempted both setup's and which one was easier/ more reliable?

Also I am still not sure exactly what hardware is needed for both systems (just for controlling lights at the current time)Insteon- 2412 control unit (serial or usb) insteon light switches

be aware that this method has some limitations. It works perfect for easy devices. But you cannot e.g. add a portable controller to your network that way. With a new remote like the Tricklestar you can also use SIS mode. Totallymaxed tried it today and was impressed. There will be an option in 0810 to later add a controller and use SIS mode.